Texas is poised to become the world's largest data center market by 2030, surpassing Northern Virginia's decades-long dominance. The shift reflects a fundamental change in how hyperscalers choose locations: power availability and workforce capacity now matter more than proximity to established tech hubs. With 6.5 gigawatts (GW) of capacity currently under construction, Texas offers what Virginia increasingly cannot deliver.

What's Driving the Shift Away From Northern Virginia?

Northern Virginia has held the title of world's most concentrated data center hub for years, hosting 663 operational facilities with 595 more in the pipeline. But the region is hitting hard limits. Grid connection delays stretch up to eight years through PJM Interconnection, the regional transmission operator that manages power distribution across the Northeast and Mid-Atlantic. Even worse, capacity prices are projected to skyrocket from under $30 per megawatt-day in 2024 to over $300 per megawatt-day by 2027.

These bottlenecks are forcing developers to look elsewhere. While Virginia's established fiber network and proximity to federal agencies remain valuable, future growth in the region will likely focus on optimizing existing sites rather than building new ones. The math is simple: when grid connections take nearly a decade and power costs multiply tenfold, even the most established hub becomes less attractive.

Why Does Texas Have the Upper Hand?

Texas offers what hyperscalers desperately need: abundant power, vast land, and grid flexibility. The state's appeal rests on several concrete advantages. Developers can build massive campuses ranging from 200 to 750 megawatts on available land. The ERCOT grid, which operates independently from the rest of the nation, provides operational flexibility that other regions cannot match. Texas also boasts a diverse energy portfolio including solar, wind, and natural gas, reducing reliance on any single power source.

"Texas is the best example of a market that has adequate transmission infrastructure, excess power generation capability, and the ability to bring new generation to market," explained Curt Holcomb, Vice Chairman at JLL.

Curt Holcomb, Vice Chairman at JLL

The $100 billion Stargate development in Abilene, a joint project led by Oracle and OpenAI, exemplifies the scale of opportunity Texas now attracts. This megaproject would have been nearly impossible to site in Virginia given current grid constraints.

Which Other States Are Emerging as Serious Contenders?

Texas is not the only winner in this reshuffling. Georgia and Pennsylvania are rapidly gaining ground by leveraging nuclear power and creative site reuse strategies. Georgia's IT load has exploded from 1.7 GW in 2021 to an anticipated 19.7 GW by 2025, fueled by a 4.5 GW baseload from the Vogtle nuclear plant and a $1.8 billion Microsoft investment that adds 324 megawatts of capacity. The state now hosts 162 operational data centers with 285 more planned, representing a 176 percent increase.

Pennsylvania is emerging as an East Coast alternative to ease power constraints. Its data center capacity jumped from 0.2 GW in 2021 to 7.8 GW by late 2025, a 188 percent increase. The state's strategy includes repurposing old industrial sites, proximity to major metropolitan areas like New York City and Washington, D.C., and supportive policies. Notable projects include the 1,500-acre Zediker Station in Washington County, which uses natural gas and remediated mine gas for net-zero power, and the restart of Unit 1 reactor at the Crane Clean Energy Center.

How Are Emerging Markets Reshaping the Entire Data Center Landscape?

• Geographic Diversification: Currently, 64 percent of the 35 GW construction pipeline in North America is located in emerging regions outside traditional hubs, with Ohio, Wisconsin, and Tennessee gaining significant traction due to better power availability.
• Cost and Speed Advantages: Newer markets offer electricity rates up to 35 percent lower than the national average and faster permitting processes, allowing developers to reach market more quickly than in established hubs.
• Explosive Growth Projections: Las Vegas and Reno are projected to grow by 953 percent, increasing from 362 megawatts to 3,812 megawatts by 2025; Salt Lake City is expected to grow by 699 percent, while Phoenix and Atlanta are forecast to expand by 554 percent and 484 percent respectively.

Traditional hubs face mounting challenges that make this shift inevitable. Land costs in established markets are 14 times higher than in newer regions. Grid connection delays average four years. Regulatory barriers continue to mount. California, once a tech powerhouse, is losing ground to states like Tennessee and Wisconsin, which now rank higher in total capacity under development. The Pacific Northwest and Chicago are also experiencing slowdowns.

"Traditional hubs are hitting hard limits on power, land, and approvals, while frontier markets offer what hyperscalers and enterprises need most: available capacity, reasonable pricing, and speed to market," explained Andrew Batson, Global Head of Data Center Research at JLL.

Andrew Batson, Global Head of Data Center Research at JLL

What Role Do Megacampuses Play in This Transformation?

The rise of megacampuses, developments exceeding 1 GW in capacity, is further reshaping the landscape. More than 10 such megacampuses are currently under construction across North America. These massive projects can quickly elevate new markets above established ones in terms of total capacity. Developers are increasingly prioritizing power availability over proximity to end-users, a fundamental shift that redirects investment toward regions with abundant resources rather than traditional population centers.

What About the Workforce Challenge?

Power availability and grid capacity are not the only factors determining where data centers get built. Workforce shortages represent a major headwind across the entire industry. Eighty percent of construction firms report struggling to fill critical roles, from project managers and engineers to specialized technicians needed for complex data center builds. This talent gap affects all regions but hits emerging markets particularly hard, as they lack the established construction ecosystems of Virginia or California.

The data center boom is fundamentally reshaping American infrastructure investment. Texas, Georgia, Pennsylvania, and emerging markets are winning because they offer what hyperscalers need most: reliable power, available land, and reasonable timelines. Virginia's dominance, built over decades, is giving way to a more distributed model driven by the relentless power demands of artificial intelligence and cloud computing.